The UK formally leaves the European Union today at 11pm, to enter an eleven month transition period and while there will be no change to UK/EU trade, Metro is accelerating preparations for the new processes that will follow transition
The transition period will last until the 31st December 2020, during which trade negotiations will commence and nothing changes to cross-border trade.
There is an option to extend the transition period for a further two years, but that option needs to be exercised by 1st July 2020 and the prime minister has insisted that there will be NO extension.
Assuming no extension is sought, you need to be prepared for the new trade regulations that will come into force on the 1st January 2021.
We recommend that you use this transition period to make sure you have your EORI number, review your requirements and our capability to protect your supply chain flow.
Being outside the EU Single Market creates the need for Customs declarations, even if we agree to remain in a Customs Union, which is why our Customs experts are making sure that our processes and data flows are set, tested and ready to process thousands of new EU import and export declarations a week.
EU law dictates that trade talks can’t start until the UK legally leaves the bloc and EU countries have agreed a mandate for the EU Commission to negotiate a comprehensive trade agreement on their behalf, so trade talks are unlikely to start before the beginning of March.
The new European Commission president, Ursula von der Leyen, has already stated that it would be “impossible” to reach a comprehensive trade deal in ten months. Suggesting we need to prepare to leave at the end of 2020 without a trade agreement, probably to trigger GATT rules, which would allow tariff free trade whilst the deal is finalised.
It is extremely unlikely that the UK will be able to negotiate an entirely frictionless exit, which means that some form of Customs declaration will be inevitable in any outcome.
We are working closely with BIFA and HMRC to stay on top of developments and will communicate any points of particular importance.
Our current expectation is:
1. The government will not extend transition beyond 31st Dec 2020
2. A comprehensive FTA will not be finalised by that time
3. GATT terms will be adopted until final deal is agreed
4. New import & export declarations will commence 1st Jan 2021